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EX-99.1 - EXHIBIT 99.1 - Unilife Corp | c21975exv99w1.htm |
EX-99.2 - EXHIBIT 99.2 - Unilife Corp | c21975exv99w2.htm |
8-K - FORM 8-K - Unilife Corp | c21975e8vk.htm |
Exhibit 99.3
UNILIFE CORPORATION
ARBN 141 042 757
Appendix 4E Preliminary Final Report
Year Ended 30 June 2011
Year Ended 30 June 2011
Results for Announcement to the Market
UNILIFE CORPORATION HIGHLIGHTS
Results for Announcement to the Market
Year Ended | Year Ended | |||||||||||||
30 June 2011 | 30 June 2010 | |||||||||||||
(US$, in thousands) | ||||||||||||||
Revenues from ordinary activities |
Down | 42% to | 6,650 | 11,422 | ||||||||||
Profit (loss) from ordinary activities after tax
attributable to members |
Up | 37% to | (40,682 | ) | (29,748 | ) | ||||||||
Net profit (loss) for the period attributable to members |
Up | 37% to | (40,682 | ) | (29,748 | ) |
Dividends (distribution) | Amount per security | Franked amount per security | ||
Final dividend |
N/A | N/A | ||
Interim dividend |
N/A | N/A | ||
Total |
N/A | N/A | ||
Record date
for determining
entitlements to the
dividend |
N/A |
Results of Operations
Revenues decreased from US$11.4 million during the year ended 30 June 2010 to US$6.7 million during
the year ended 30 June 2011. This decrease was primarily attributable to a decrease in revenues
associated with the industrialization program for the Unifill syringe due to the nature and timing
of milestones achieved during the years ended 30 June 2011 and 2010.
Net loss increased from US$29.7 million during the year ended 30 June 2010 to US$40.7 million
during the year ended 30 June 2011. The increase in the net loss was attributable to the decline
in revenues as well as an increase in payroll expense and depreciation and amortization expense.
These amounts were partially offset by a decline in legal and consulting fees incurred during the
Companys redomiciliation to the United States.
Preliminary Final Report to 30 June 2011 | 2 | |
Unilife Corporation ARBN 141 042 757 |
Review of Activities
Completion of Corporate Headquarters and Production Facility in York, PA
In December 2010, Unilife relocated its operations into a new, 165,000 square foot state-of-the art
manufacturing facility and global headquarters in York, PA. Designed by leading U.S. architects to
meet the most stringent international pharmaceutical standards for primary drug containers and
advanced drug delivery systems, construction of the facility was completed on-schedule and
on-budget within approximately 12 months. The $32 million facility was funded through an investment
of $10 million by Unilife, grants and low-interest loans from the Pennsylvania Government, and an
$18 million mortgage with a local bank of which $10 million was underwritten by a loan guarantee
from the U.S. Department of Agriculture.
The facility has the capacity to manufacture up to 400 million Unilife syringes a year, with a
second stage already pre-approved that would add another 100,000 square feet of production space,
and take the total production capacity of the site to around one billion units per year subject to
commercial demand.
Features of the facility include eight Class 8 and three Class 7 clean rooms where environmental
factors such as temperature, humidity, microbial and particulate matter are tightly controlled; an advanced Water-for-Injection (WFI) system that will meet established pharmaceutical standards of
water purity required for the production of the Unifill ready-to-fill syringe; microbiology and
quality inspection labs; a product development center; and a 20,000 square foot temperature
controlled warehouse for efficient inventory management.
Unifill Ready-to-Fill (Prefilled) Syringe
Unilife commenced initial production of the Unifill® ready-to-fill (prefilled) syringe at its
FDA-registered manufacturing facility in York, PA in March 2011. The Unifill syringe is the
worlds first and only known prefilled syringe with safety features fully integrated within the
glass barrel. It is designed for integration into the standard fill-finish systems of
pharmaceutical companies currently used with equivalent standard (non-safety) prefilled syringes.
Components with the fluid path of the primary drug container are USP-compatible to support customer
and regulatory requirements for drug stability.
In July 2011, Unilife commenced the initial supply of the Unifill syringe to sanofi-aventis, as per
the terms of the industrialization agreement between both parties. Since signing the Exclusive
Agreement in July 2008, sanofi-aventis has paid Unilife a total of approximately $40 million,
comprising a $16 million (euro 10 million) fee in exchange for the exclusive right to negotiate the
purchase of the Unifill syringe, and to help fund the Industrialization Program for the device up
to a maximum of $24 million (euro 17 million). Sanofi-aventis has secured exclusivity for the
Unifill syringe within the full therapeutic classes of antithrombotic agents and vaccines, plus an
additional four smaller sub-groups, until June 30, 2014.
Later in July 2011, Unilife commenced the initial sale of the Unifill syringe to a second customer,
a U.S.-based global pharmaceutical company whose identity is subject to a confidentiality
agreement. Unilife expects that additional pharmaceutical companies that it is in negotiations with
will conduct drug compatibility and stability tests in combination with the Unifill syringe as per
standard industry practices for drug-device combination products. The resulting data is then filed
with regulatory agencies as a final step before approval.
Unitract 1mL Syringes
In September 2010, Unilife received 510(k) market clearance from the U.S. Food and Drug
Administration (FDA) for the sale and marketing of an additional product variant within its
Unitract® range of 1mL safety syringes, known as the Unitract Tuberculin (TB) syringe. In November
2010, Unilife commenced U.S. sales of its Unitract range of 1mL insulin and TB syringes. Unilife
and Independent Medical Co-Op, Inc. (IMCO), one of the largest medical supply co-operatives in
the U.S., entered into a preferred, non-exclusive marketing program at this time for the sale of
Unitract 1mL syringes to U.S. healthcare facilities. Unilife has subsequently sold the Unitract 1ml
syringes to a number of IMCOs network member distributors across the U.S who primarily call on the
physician and long-term care markets.
Development of a Diversified Portfolio of Advanced Drug Delivery Systems
Unilife has invested heavily in R&D to support the diversification of its portfolio of advanced
drug delivery systems. Today, the company has developed a broad platform of primary drug containers
and other device technologies that is designed to support the administration of injectable drugs
and vaccines, including biologics, supplied in a liquid or dry drug form for reconstitution, across
a wide range of therapeutic classes. Many of these technology platforms have been developed in
direct response to the unmet requirements of pharmaceutical companies the company is in active
discussions with. These technology platforms include:
Preliminary Final Report to 30 June 2011 | 3 | |
Unilife Corporation ARBN 141 042 757 |
Prefilled Syringes (Primary Drug Containers) with Integrated Safety Features: Unilife has
developed a strong platform of ready-to-fill (prefilled) syringes with integrated safety features
that are suitable for use with virtually all injectable drugs and vaccines that are targeted for
use in a prefilled format. The platform includes a range of single and multiple chamber prefilled
delivery systems that can serve as a primary drug container for liquid stable or lyophilized drugs
requiring reconstitution. In addition to the Unifill syringe that is now in production and being
supplied to pharmaceutical companies, Unilife has also developed a number of other technology
variants within this product pipeline. This includes additional prefilled variants which, like the
Unifill syringe, feature a staked (fixed) needle to support the delivery of injectable drugs
indicated for subcutaneous or pediatric intramuscular injection. In addition, Unilife has
proprietary Unifill technology for prefilled syringes supplied with a hub suitable for the
attachment of interchangeable needles up to 1 1/2 in length.
Other Injectable drug delivery technology platforms: Unilife has also developed a number of
additional technology platforms for the delivery of injectable drugs and vaccines. These include
patient self-administration systems for viscous, large-volume drugs, and specialized devices for
targeted organ delivery.
Staff Appointments
In April 2011, Unilife undertook a scheduled realignment of its operating infrastructure as it
transitioned into an industrial manufacturer and supplier of the Unifill syringe and other advanced
drug delivery systems to its pharmaceutical customers. In addition to the elimination of a number
of redundant positions across various levels of the organization, Unilife strengthened and expanded
its sales and marketing team to support the more rapid development of commercial relationships with
a wider range of healthcare and pharmaceutical companies. Additional executives and senior
management leaders to have been engaged by Unilife during the year include:
Dr. Ramin Mojdeh Ph.D MBA (Chief Operating Officer and Executive Vice President) has more than 25
years of business leadership experience across multiple industries, including 18 years in the
design, development, manufacturing, sales and marketing of therapeutic and diagnostic medical
devices for several multinational companies including Becton Dickinson (BD) Pharmaceutical
Systems, GE Healthcare and Guidant. He was Vice President and General Manager of BD, North America
between 2008 and 2010 and Worldwide Vice President of Research and Development, BD Medical between
2002 and 2008.
Christopher Naftzger, BA, JD, (Vice President, General Counsel, Corporate Secretary and Chief
Compliance Officer) has sixteen years of legal experience. Formerly with Chesapeake Corporation, as
Assistant General Counsel and Assistant Secretary, he managed negotiations for multi-year /
multi-product supply contracts with a number of leading pharmaceutical and healthcare companies.
Mr. Naftzger provides the management team and Board of Directors of Unilife with counsel on all
international, legal and government matters as well as corporate finance and SEC regulation.
Dr. Jack Kelley. PhD, MBA (VP, Strategic Marketing) has over 15 years of broad leadership
experience across a number of businesses key to healthcare innovation and commercialization,
including life science research, venture capital, investment banking, large cap medical device and
pharmaceutical drug delivery. He has held senior leadership positions at Medtronic, JP Morgan and
BD. Most recently, he served as the Worldwide Director, Strategic Marketing and Business
Development at BD Pharmaceutical Systems, a leading supplier of conventional prefilled syringes.
Michael C. Ratigan, B.Sc (VP, Commercial Development) has 20 years of senior leadership with life
science and medical device companies including BD, Stryker Orthopaedics and Merck & Co. Prior to
joining Unilife, he served as the Commercial Development Director for Self-Administration of
Injectable Systems (SAIS) at BD. Prior to this, he also held the additional role of Director of
Sales (Prefilled Syringes) for North America, where he led the prefilled syringe commercial
organization responsible for sales, customer service and commercial development.
Ian Hanson, M.S. B.S.M.E (Director of Advanced Drug Delivery Systems) is one of the worlds
foremost experts in subcutaneous infusion devices. At Medtronic Diabetes, he was the Senior
Engineering Manager and Leader of Advanced Engineering and Systems Department. He also served on
the Medtronic Diabetes R&D board for Quality Improvement Team and as the corporate representative
expert on Medtronic insulin pump systems.
Preliminary Final Report to 30 June 2011 | 4 | |
Unilife Corporation ARBN 141 042 757 |
Masoud Samandi, Ph.D., (Senior Director, R&D) has 30 years of academic and industrial
activities in research and development for biomedical applications. Before joining Unilife, Dr.
Samandi was a Senior Staff Engineer at BD where he developed a number of products within the
advanced drug delivery systems sector.
Board Appointments
During the year, Unilife also elected Marc Firestone to its Board as a Non-Executive Director. Mr.
Firestone is the Executive Vice President and General Counsel for Kraft Foods, a Fortune 100
company and the largest food company in the United States with annual, worldwide sales of
approximately $48 billion. Mr. Firestone is chair of the Unilife Nominating and Corporate
Governance Committee and serves as a member of the Strategic Partnerships Committee.
Preliminary Final Report to 30 June 2011 | 5 | |
Unilife Corporation ARBN 141 042 757 |
Consolidated Statements of Financial Performance
(US$, in thousands, except per share data)
(US$, in thousands, except per share data)
Year Ended 30 June | ||||||||
2011 | 2010 | |||||||
Revenues: |
||||||||
Industrialization fees |
$ | 1,350 | $ | 6,318 | ||||
Licensing fees |
2,527 | 2,566 | ||||||
Products sales and other |
2,773 | 2,538 | ||||||
Total revenues |
6,650 | 11,422 | ||||||
Cost of product sales |
2,597 | 2,471 | ||||||
Gross profit |
4,053 | 8,951 | ||||||
Operating expenses: |
||||||||
Research and development |
9,631 | 10,934 | ||||||
Selling, general and administrative |
31,571 | 26,257 | ||||||
Depreciation and amortization |
4,009 | 2,314 | ||||||
Total operating expenses |
45,211 | 39,505 | ||||||
Operating loss |
(41,158 | ) | (30,554 | ) | ||||
Interest expense |
511 | 125 | ||||||
Interest income |
(399 | ) | (1,066 | ) | ||||
Other (income) expense, net |
(588 | ) | 135 | |||||
Net loss |
$ | (40,682 | ) | $ | (29,748 | ) | ||
Loss per share: |
||||||||
Basic and diluted loss per share |
$ | (0.70 | ) | $ | (0.64 | ) | ||
Preliminary Final Report to 30 June 2011 | 6 | |
Unilife Corporation ARBN 141 042 757 |
Consolidated Statements of Financial Position
(US$, in thousands, except share data)
(US$, in thousands, except share data)
30 June | ||||||||
2011 | 2010 | |||||||
Assets |
||||||||
Current Assets: |
||||||||
Cash and cash equivalents |
$ | 17,910 | $ | 20,750 | ||||
Restricted cash |
2,400 | | ||||||
Accounts receivable |
13 | 1,556 | ||||||
Inventories |
626 | 797 | ||||||
Prepaid expenses and other current assets |
381 | 637 | ||||||
Total current assets |
21,330 | 23,740 | ||||||
Property, plant and equipment, net |
54,020 | 29,972 | ||||||
Goodwill |
13,265 | 10,792 | ||||||
Intangible assets, net |
42 | 40 | ||||||
Other assets |
821 | 273 | ||||||
Total assets |
$ | 89,478 | $ | 64,817 | ||||
Liabilities and Stockholders Equity |
||||||||
Current Liabilities: |
||||||||
Accounts payable |
$ | 2,405 | $ | 6,044 | ||||
Accrued expenses |
2,696 | 2,911 | ||||||
Current portion of long-term debt |
2,274 | 1,648 | ||||||
Deferred revenue |
2,706 | 2,188 | ||||||
Total current liabilities |
10,081 | 12,791 | ||||||
Long-term debt, less current portion |
20,413 | 1,093 | ||||||
Deferred revenue |
5,412 | 6,563 | ||||||
Total liabilities |
35,906 | 20,447 | ||||||
Contingencies |
||||||||
Stockholders Equity: |
||||||||
Preferred stock, $0.01 par value,
50,000,000 shares authorized as of 30 June 2011; none issued or outstanding as of
30 June 2011 and 2010 |
| | ||||||
Common stock, $0.01 par value,
250,000,000 shares authorized as of 30 June 2011; 63,924,403 and 54,761,848 shares
issued, and 63,905,053 and 54,761,848 shares outstanding as of
30 June 2011 and 2010, respectively |
639 | 548 | ||||||
Additional paid-in-capital |
169,590 | 122,397 | ||||||
Accumulated deficit |
(120,332 | ) | (79,650 | ) | ||||
Accumulated other comprehensive income |
3,775 | 1,075 | ||||||
Treasury stock at cost, 19,350
shares as of 30 June 2011 |
(100 | ) | | |||||
Total stockholders equity |
53,572 | 44,370 | ||||||
Total liabilities and stockholders equity |
$ | 89,478 | $ | 64,817 | ||||
Preliminary Final Report to 30 June 2011 | 7 | |
Unilife Corporation ARBN 141 042 757 |
Consolidated Statements of Changes in Equity
(US$, in thousands except share data)
(US$, in thousands except share data)
Accumulated | ||||||||||||||||||||||||||||
Additional- | Other | |||||||||||||||||||||||||||
Common Stock | Paid-In | Accumulated | Comprehensive | Treasury | ||||||||||||||||||||||||
Shares | Amount | Capital | Deficit | Income | Stock | Total | ||||||||||||||||||||||
Balance as of 1 July 2009 |
36,625,802 | 366 | 57,987 | (49,902 | ) | 2,860 | | 11,311 | ||||||||||||||||||||
Comprehensive loss: |
||||||||||||||||||||||||||||
Net loss |
| | | (29,748 | ) | | | (29,748 | ) | |||||||||||||||||||
Foreign currency translation |
| | | | (1,785 | ) | | (1,785 | ) | |||||||||||||||||||
Comprehensive loss |
(31,533 | ) | ||||||||||||||||||||||||||
Issuance of options and warrants to purchase common stock |
| | 3,463 | | | | 3,463 | |||||||||||||||||||||
Issuance of restricted stock |
1,818,000 | 18 | 2,236 | | | | 2,254 | |||||||||||||||||||||
Issuance of common stock in connection with private placement and share purchase plan, net of issuance
costs |
10,544,961 | 106 | 47,011 | | | | 47,117 | |||||||||||||||||||||
Issuance of common stock upon exercise of stock options |
1,606,419 | 17 | 2,332 | | | | 2,349 | |||||||||||||||||||||
Issuance of common stock to employees |
833,333 | 8 | 4,331 | | | | 4,339 | |||||||||||||||||||||
Issuance of common stock to former shareholders of Unitract Syringe Pty Limited |
3,333,333 | 33 | 5,037 | | | | 5,070 | |||||||||||||||||||||
Balance as of 30 June 2010 |
54,761,848 | $ | 548 | $ | 122,397 | $ | (79,650 | ) | $ | 1,075 | | $ | 44,370 | |||||||||||||||
Comprehensive loss: |
||||||||||||||||||||||||||||
Net loss |
| | | (40,682 | ) | | | (40,682 | ) | |||||||||||||||||||
Foreign currency translation |
| | | | 2,700 | | 2,700 | |||||||||||||||||||||
Comprehensive loss |
(37,982 | ) | ||||||||||||||||||||||||||
Issuance of options and warrants to purchase common stock |
| | 4,071 | | | | 4,071 | |||||||||||||||||||||
Issuance of restricted stock |
420,000 | 4 | 6,442 | | | | 6,446 | |||||||||||||||||||||
Issuance of common stock in connection with private placement and share purchase plan, net of issuance costs |
7,048,373 | 70 | 33,361 | | | | 33,431 | |||||||||||||||||||||
Issuance of common stock upon exercise of stock options |
1,670,998 | 17 | 3,193 | | | | 3,210 | |||||||||||||||||||||
Issuance of common stock to employees |
23,184 | | 126 | | | | 126 | |||||||||||||||||||||
Purchase of treasury stock |
| | | | | (100 | ) | (100 | ) | |||||||||||||||||||
Balance as of 30 June 2011 |
63,924,403 | $ | 639 | $ | 169,590 | $ | (120,332 | ) | $ | 3,775 | $ | (100 | ) | $ | 53,572 | |||||||||||||
Preliminary Final Report to 30 June 2011 | 8 | |
Unilife Corporation ARBN 141 042 757 |
Consolidated Statements of Cash Flow
(US$, in thousands)
(US$, in thousands)
Year Ended 30 June | ||||||||
2011 | 2010 | |||||||
Cash flows from operating activities: |
||||||||
Net loss |
$ | (40,682 | ) | $ | (29,748 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Depreciation and amortization |
3,482 | 2,314 | ||||||
Loss on disposal of property, plant and equipment |
527 | | ||||||
Share-based compensation expense |
9,022 | 10,056 | ||||||
Changes in assets and liabilities: |
||||||||
Accounts receivable |
1,739 | 5,852 | ||||||
Inventories |
176 | 302 | ||||||
Prepaid expenses and other current assets |
266 | (385 | ) | |||||
Other assets |
(552 | ) | 270 | |||||
Accounts payable |
(515 | ) | 863 | |||||
Accrued expenses |
543 | 656 | ||||||
Deferred revenue |
(2,527 | ) | (2,570 | ) | ||||
Net cash used in operating activities |
(28,521 | ) | (12,390 | ) | ||||
Cash flows from investing activities: |
||||||||
Purchases of property, plant and equipment |
(30,037 | ) | (17,562 | ) | ||||
Purchases of certificates of deposit |
| (9,106 | ) | |||||
Proceeds from the redemption of certificates of deposit |
| 8,536 | ||||||
Net cash used in investing activities |
(30,037 | ) | (18,132 | ) | ||||
Cash flows from financing activities: |
||||||||
Proceeds from the issuance of common stock, net of issuance costs |
33,431 | 47,117 | ||||||
Proceeds from the exercise of options to purchase common stock |
3,210 | 2,349 | ||||||
Proceeds from the issuance of long-term debt |
20,190 | | ||||||
Principal payments on long-term debt and capital lease agreements |
(493 | ) | (411 | ) | ||||
Proceeds from the issuance of note payable |
6,900 | | ||||||
Principal payments on note payable |
(6,900 | ) | | |||||
Purchase of treasury stock |
(100 | ) | | |||||
(Increase) decrease in restricted cash |
(2,400 | ) | 433 | |||||
Net cash provided by financing activities |
53,838 | 49,488 | ||||||
Foreign currency exchange on cash |
1,880 | (1,843 | ) | |||||
Net (decrease) increase in cash and cash equivalents |
(2,840 | ) | 17,123 | |||||
Cash and cash equivalents at beginning of year |
20,750 | 3,627 | ||||||
Cash and cash equivalents at end of year |
$ | 17,910 | $ | 20,750 | ||||
Supplemental disclosure of cash flow information |
||||||||
Cash paid for interest |
$ | 514 | $ | 135 | ||||
Supplemental disclosure of non-cash activities |
||||||||
Purchases of property, plant and equipment in accounts payable and accrued expenses |
$ | 1,143 | $ | 5,051 | ||||
Purchases of property, plant and equipment pursuant to capital lease agreements |
$ | 249 | $ | | ||||
Issuance of common stock to former shareholders of Unitract Syringe Pty Limited |
$ | | $ | 5,070 | ||||
Purchases of property, plant and equipment through the issuance of warrants |
$ | 1,621 | $ | | ||||
Preliminary Final Report to 30 June 2011 | 9 | |
Unilife Corporation ARBN 141 042 757 |
Notes to the Consolidated Financial Statements
1. | Basis of the Preparation of the Preliminary Final Report |
The preliminary final report has been prepared in accordance with the ASX Listing rule 4.3A and
the disclosure requirements of ASX Appendix 4E. |
The preliminary final report has been prepared in accordance with accounting principles
generally accepted in the United States of America. |
References to the Company include Unilife Corporation and its consolidated subsidiaries. |
Certain amounts in the consolidated statements of operations were reclassified from selling,
general and administrative expenses to research and development expenses. Management has
determined that activities performed by certain employees were more closely associated with
research and development activities and has reclassified those items on the accompanying
consolidated statements of operations. This reclassification did not affect the consolidated
balance sheets or consolidated statements of cash flows. Additionally, the reclassification did
not affect operating loss or net loss on the consolidated statements of operations. |
2. | The Board of Directors does not recommend that a dividend relating to the year ended 30
June 2011 be paid. As such, there is no applicable record date. |
3. | Property, Plant and Equipment |
Property, plant and equipment consist of the following: |
30 June 2011 | 30 June 2010 | |||||||
(US$, in thousands) | ||||||||
Building |
$ | 31,866 | $ | | ||||
Machinery and equipment |
16,130 | 10,848 | ||||||
Computer software |
2,457 | 528 | ||||||
Furniture and fixtures |
323 | 737 | ||||||
Construction in progress |
5,734 | 18,560 | ||||||
Land |
2,036 | 2,036 | ||||||
Leasehold improvements |
| 1,026 | ||||||
58,546 | 33,735 | |||||||
Less: accumulated depreciation and amortization |
(4,526 | ) | (3,763 | ) | ||||
Property, plant and equipment, net |
$ | 54,020 | $ | 29,972 | ||||
Construction in progress as of 30 June 2011 consisted primarily of amounts incurred in
connection with machinery and equipment. Construction in progress as of 30 June 2010 consisted
primarily of amounts incurred in connection with the construction of the Companys new
manufacturing facility and machinery and equipment. |
4. | Long-Term Debt |
Long-term debt consists of the following: |
30 June 2011 | 30 June 2010 | |||||||
(US$, in thousands) | ||||||||
Mortgage loans |
$ | 17,940 | $ | | ||||
Bank term loans |
2,095 | 2,393 | ||||||
Commonwealth of Pennsylvania financing authority loan |
2,227 | | ||||||
Other |
425 | 348 | ||||||
22,687 | 2,741 | |||||||
Less: current portion of long-term debt |
2,274 | 1,648 | ||||||
Total long-term debt |
$ | 20,413 | $ | 1,093 | ||||
Preliminary Final Report to 30 June 2011 | 10 | |
Unilife Corporation ARBN 141 042 757 |
Mortgage Loans
In October 2010, the Company entered into a loan agreement with Metro Bank (Metro), pursuant
to which Metro agreed to provide the Company with two notes in the amounts of $14.25 million and
$3.75 million. The proceeds received have been used to finance construction of the Companys new
corporate headquarters and manufacturing facility in York, Pennsylvania, including the repayment of
a $6.9 million bridge construction loan. |
||
The $14.25 million term note matures 20 years from completion of construction of the Companys
new corporate headquarters and manufacturing facility and the $3.75 million term note matures on 20
October, 2020. During construction, the Company paid only interest on both notes at the Prime Rate
plus 1.50% per annum, with a floor of 4.50% per annum. For a period of five years subsequent to
construction, the Company will pay principal and interest on both term notes, with interest at a fixed
rate based on the 5 year Treasury-bill plus 300 basis points per annum, with a floor of 6.0% per
annum. Commencing five years subsequent to construction through the maturity dates for each term
note, the Company will pay principal and interest on both term notes, with interest at a rate to be
negotiated by the parties, or if no rate is negotiated, based upon the Prime Rate plus 1.0% per
annum, with a floor not to exceed 250 basis points over the Prime Rate. |
||
The loan agreement contains certain customary covenants, including the maintenance of a Debt
Service Reserve Account in the amount of $2.4 million, classified as restricted cash on the
consolidated balance sheet, which will remain in place until the Company and Metro agree on the
financial covenants. The Company may prepay the loan, but will incur a prepayment penalty of 2.0%
during the first three years. The U.S. Department of Agriculture has guaranteed $10.0 million of
the loan. |
||
Bank Term Loans |
||
Bank term loans consist of two term loans payable. The loans bear interest at a rate of prime
(3.25% as of 30 June, 2011) plus 1.50%. (4.75% as of 30 June 2011) per annum and mature on dates
ranging from August 2011 through August 2021. The borrowings under the bank term loans are
collateralized by the Companys accounts receivable, inventories and certain machinery and
equipment. |
||
Commonwealth of Pennsylvania Financing Authority Loan |
||
In October 2009, the Company accepted a $5.45 million offer of assistance from the
Commonwealth of Pennsylvania which included up to $2.25 million in financing for land and the
construction of its new manufacturing facility. In December 2010, the Company received the $2.25
million loan which bears interest at a rate of 5.0% per annum, matures in January 2021 and is
secured by a third mortgage on its new facility. |
5. | Share-Based Compensation |
The following is a summary of activity related to stock options held by employees and board members
during the year ended 30 June 2011. |
Number of | Weighted Average | |||||||
Options | Exercise Price | |||||||
Outstanding as of 1 July 2010 |
4,058,701 | $ | 3.70 | |||||
Granted |
1,493,517 | 5.57 | ||||||
Exercised |
(573,031 | ) | 2.14 | |||||
Cancelled |
(279,976 | ) | 3.86 | |||||
Outstanding as of 30 June 2011 |
4,699,211 | $ | 4.48 | |||||
Exercisable as of 30 June 2011 |
1,554,169 | $ | 2.61 | |||||
Preliminary Final Report to 30 June 2011 | 11 | |
Unilife Corporation ARBN 141 042 757 |
The following is a summary of activity related to stock options and warrants held by
non-employees during the year ended 30 June 2011. |
Number of | ||||||||
Options and | Weighted Average | |||||||
Warrants | Exercise Price | |||||||
Outstanding as of 1 July 2010 |
6,355,642 | $ | 7.15 | |||||
Granted |
2,868,934 | 9.28 | ||||||
Exercised |
(1,097,967 | ) | 2.07 | |||||
Outstanding as of 30 June 2011 |
8,126,609 | $ | 8.59 | |||||
Exercisable as of 30 June 2011 |
7,126,609 | $ | 8.85 | |||||
The following is a summary of activity related to restricted stock awards during the year
ended 30 June 2011. |
Number of | Weighted Average | |||||||
Restricted Stock | Grant Date Fair | |||||||
Awards | Value | |||||||
Unvested as of 1 July 2010 |
1,818,000 | $ | 6.40 | |||||
Granted |
470,000 | 5.24 | ||||||
Vested |
(281,000 | ) | 6.07 | |||||
Forfeited |
(50,000 | ) | 5.46 | |||||
Unvested as of 30 June 2011 |
1,957,000 | $ | 6.19 | |||||
6. | Loss per Share |
|
The Companys net loss per share is as follows. |
Year Ended 30 June | ||||||||
2011 | 2010 | |||||||
(US$, in thousands, except | ||||||||
share and per share data) | ||||||||
Numerator |
||||||||
Net loss |
$ | (40,682 | ) | $ | (29,748 | ) | ||
Denominator |
||||||||
Weighted average number of shares used to compute basic loss per share |
57,891,024 | 46,837,066 | ||||||
Effect of dilutive options to purchase common stock |
| | ||||||
Weighted average number of shares used to compute diluted loss per share |
57,891,024 | 46,837,066 | ||||||
Basic and diluted loss per share |
$ | (0.70 | ) | $ | (0.64 | ) | ||
7. | Net Tangible Assets per Security |
30 June 2011 | 30 June 2010 | |||||||
Net tangible assets per share |
US$ | 0.63 | US$ | 0.61 | ||||
Net tangible assets per CDI |
A$ | 0.10 | A$ | 0.10 |
8. | Events Subsequent to the Balance Date |
On 15 August 2011, the Company entered into a Master Lease Agreement with Varilease Finance,
Inc. (Varilease). Under the Master Lease Agreement, Varilease will provide up to $10.0 million
of lease financing for production equipment for the Unifill® ready-to-fill syringe. The Company
has the option of selling and leasing back existing equipment or using the facility to lease
additional equipment. |
||
Under the terms of the Master Lease Agreement, the Company will lease the equipment from
Varilease for a two-year base term, and the Company will pay rent in equal monthly installments of
up to $0.4 million over the base term. |
The Master Lease Agreement contains covenants and provisions for events of default customarily
found in lease agreements. The Company may prepay the monthly rent payments without penalty. At
the end of the lease term, the Company has the option to extend the lease, return the equipment or
purchase the equipment, as defined in the agreement. |
Preliminary Final Report to 30 June 2011 | 13 | |
Unilife Corporation ARBN 141 042 757 |
9. | Compliance Statement |
This report is based on the financial statements to which one of the following applies.
o | The financial statements have been audited. | o | The financial statements have been supplied to review. | |||||
þ | The financial statements are in the process of being audited or subject to review. | o | The financial statements have not yet been audited or reviewed. |
|
||||
Chairman | ||||
Date: 31 August 2011 |
Preliminary Final Report to 30 June 2011 | 13 | |
Unilife Corporation ARBN 141 042 757 |